Public Finance and Environment

Thailand
UPDC PROJECT, HIN KRUT, Coal fired Power Plant

UPDC( Union Power Development
Corporation)(IPP) consisting of :
Tomen, Japan: 34%
Fortum, Finland: 28%
Consolidated Electric Power Asia Ltd. (CEPA), USA: 28%
Union Energy, Thai: 10%
Total investing Amount: 1.2 billion USD
Electricity generation date: UPDC has requested that sale of electricity
from its 1400 MW project be delayed by 21 months. The proposed power
plant was scheduled to start supplying the first 700 MW of electricity
in July 2005 and the 2nd unit in October 2005. We have not yet heard
if the delay has been approved by EGAT.

Financiers:
JBIC(Japan Bank for International Collaboration) is considering support.
JBIC has not yet agreed to finance the UPDC project. JBIC has been waiting
for the Thai cabinet decision. However, it appears that JBIC has been
holding meetings with US Exim to discuss impacts on coral coast. NGOs
meet with JBIC regularly to discuss the projects and to discuss their
environmental guidelines. According to Mekong Watch, JBIC is now waiting
for the new governments confirmation of the project (following the January
2000 Thai election).
Leonia Corporation Bank (formerly Finnish Export Credit), Nordic Investment
Bank and Finnerva were considering providing financing when Fortum was
active. Pending confirmation of Fortums withdrawal, these companies
will make no comment about their commitment.
EFIC (the Australian ECA) is considering to support to assist Australian
coal exports.
On 2 November 1999, Greens Senator Bob Brown asked questions in parliament
concerning the role of EFIC and government funding in the projects.
Senator Brown also asked about the environmental impacts and whether
tests had been carried out on the clean coal. The government reply was
ambiguous.

EIA:
First EIA approval May 1998. Following the discovery that the EIA failed
to identify coral reefs near the site, further work on the EIA was required.
Second EIA, which included information about the coral reef, approved
by the OEPP on 9 October 2000. A consolidated EIA (and English translation)
should be available mid-2001. Local people still oppose the EIA on the
basis of incorrect information on the number of fishers and inadequate
study on impact to fishery.

Public hearing:
Held 24-25 February, 2000. Local people boycotted the hearing. Thousands
of local people protested outside, including 500 fishing boats. Report
of the hearing recommended that a tripartite committee be established
to deal with any problems and to monitor pollution. The committee has
been established, but has never been active in monitoring the project.
Local people believe it is just a token set up and funded by the UPDC
to silence their opposition.

Local opposition:

Local people have opposed the project since about 1997. They have petitioned
all the relevant authorities in Thailand and the governments of foreign
companies via the Finnish and American embassies in Bangkok. On 9 October,
the Ban Krut Municipality voted to oppose the project and called on
the Prime Minister and Cabinet members to cancel the project. During
the public debate over the power plant, local people have been fired
upon and threatened.

NGOs( Thailand, Japan, USA,
Finland and Australia)are closely collaborating.
Key strategic focus : corruption, local opposition, environmental impacts
(coral, wetland), loss of livelihoods
In March 2000, Mekong Watch and FoE Japan held briefing and lobbying
meetings with MPs, Budget Committee of the House of Councilors, Permanent
Committee on Economy and Industry, JBIC and the Ministry of Finance.
A campaign video made by Mekong Watch was shown at some of the meetings.
Officials at all meetings indicated they are waiting for Thai procedures.
On 25 July 2000, the Nature and Environment Conservation Group of Ban
Krut and Local Care Group of Bo Nok sent a letter to the president of
JBIC calling on JBIC not to support either project.
In November 2000, the Local Care Group Bo Nok, the Bo Nok SAO, and the
Nature and Environment Conservation Group of Ban Krut each sent a letter
to the president of JBIC.
On 24 January 2001, on regular meeting with Ministry of Finance, Japanese
NGOs concerned appealed MoF to watch JBIC's evaluation process of the
project carefully.